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LEGO Record Australian Push Stacks Up
Global toy manufacturer LEGO will next year export more of its iconic plastic
bricks to Australia than ever before, building its Australian sales target to
$130 million, the group’s chief executive said.
Speaking from Sydney on the 50th anniversary of LEGO blocks in Australia, Jorgen
Vig Knudsorp told Fairfax the group had turned itself around over the last five
years to come back on top of the toy market after playing catch-up to video
games.
“We had huge losses,” he said, of the company’s state eight years ago. “We had
very significant negative cash flow to the tune of about $200 million in
Australian money today. That was significant. But we were never in a situation
where you could say the company would close.”
The turnaround was felt just as sharply in Australia, where fans of the building
blocks now spend around $250 per household a year on LEGO products.
“We’ve moved from a few million dollars to more than a $100 million (in
Australia), and in the last five years or so we’ve seen a very strong
double-digit growth taking us to a number one position in the marketplace,” he
said.
“It’s been a long journey.”
LEGO U-turn can be in part attributed to Mr Knudsorp’s strategy to capitalise on
other people’s successes. Last year, it released building sets inspired by the
Pirates of the Caribbean film series, and its Star Wars video game.
“Today, almost half of the toy market is driven by licensing, simply because it
makes toys more relevant to kids,” he said.
“One concern was whether it limits the creativity when you build within Star
Wars. But what we found was that children actually write their own stories in
their head. So the fact that there is a film is a starter for the kids.”
LEGO latest strategy – to appeal more to girls – has been more controversial.
Released last year, LEGO Friends remodels the stubby LEGO “man” into a young,
slender girl with pink tops and interchangeable handbags.
Mr Knudsorp admitted that it was “very dangerous” to stereotype boys and girls,
but that ultimately they “played differently”.
“The truth is, when it comes to heavy positioning and marketing, you are in an
environment where there is a difference in how you speak to boys and how you
speak to girls.”
The company made $109 million in Australia last financial year, and expects that
number to grow by 20 per cent next year.
Mr Knudsorp said it was a challenging time to be a retailer, but that the
traditional arms of the company were continuing to expand.
“Even our core LEGO construction business is growing at about 10 per cent due to
strength of the classic LEGO experience.”
The Sydney Morning Herald
smh.com.au
-end of report-
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